Emergency Fund, Emergency Fun!

Once I paid off my major student loan, I set upon my next task – saving an emergency fund while learning more about investing.

Where to begin?

For me, I need a goal – something to strive for. I calculated my monthly basic expenses at around $1500, so a 6 month emergency fund would be about $9000. Rounding up to $10K, I had my goal.

Where to park it?

I believe true emergency funds should be:

1. Completely separate from your checking account but accessible without fees or more than a day or two in processing, and,

2. Only used in actual emegercies (more on that later.)

I’ve had a Tangerine (formerly ING Direct) TFSA set up for a number of years, and versions of an emergency fund started more times than i can count, and then raided. It’s interest rate (currently 1.05%) is much better than my home bank although not the best you can find. This was the place for the emergency fund.

When to use it?


I have savings strategies for all expected expenses – dentist appointments, insurance payments, going back to school, Christmas presents, etc. these are not emergencies. These are things that are bound to happen. I most often read about people having car or pet ’emergencies’ – but if you have either of those, you should know there will be expenses associated and save accordingly. I don’t want a car anytime soon, but know I’ll eventually buy one – I’m saving for it already, even though it will likely be 5+ years before I want to buy one.

The only time I would use this money is if my health and/or job failed me and I needed some extra funds in a transition.

How am I doing?

Here’s my progress since October 2014:


66% ya’ll!

Once I hit $6k in May I shifted some of the funds going to emergency to my other investments for retirement savings. I’m on track to reach this goal in May 2016! I titled this ‘…Emergency Fun!” because actually get a giddy feeling knowing I have this cushion I can fall back on.

Do you have an emergency fund? How much are you saving? Have you ever had to use it?


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